debt clock

Thursday, December 30, 2010

12/22/10 In 43 BC, over 2,000 years ago, warring consuls Antony, Lepidus, and Octavian were duking it out with each other over control of Rome following Julius Caesar’s assassination the prior March.

Each had legions at his disposal, and Rome’s terrified Senate sat on its hands waiting for the outcome. Ultimately, the three men chose to unite their powers and rule Rome together in what became known as the Second Triumvirate. This body was established by a law named Lex Titia in 43 BC.

The foundation of the Second Triumvirate is of tremendous historical importance: As the group wielded dictatorial powers, it represented the final nail in the coffin in Rome’s transition from republic to malignant autocracy.

The Second Triumvirate expired after 10 years, upon which Octavian waged war on his partners once again, resulting in Mark Antony’s famed suicide with Cleopatra in 31 BC. Octavian was eventually rewarded with nearly supreme power, and he is generally regarded as Rome’s first emperor.

Things only got worse from there. Tiberius, Octavian’s successor, was a paranoid deviant with a lust for executions. He spent the last decade of his reign completely detached from Rome, living in Capri.

Following Tiberius was Caligula, infamous for his moral depravity and insanity. According to Roman historians Suetonius and Cassius Dio, Caligula would send his legions on pointless marches and turned his palace into a bordello of such repute that it inspired the 1979 porno film named for him.

Caligula was followed by Claudius, a stammering, slobbering, confused man as described by his contemporaries. Then there was Nero, who not only managed to burn down his city, but was also the first emperor to debase the value of Rome’s currency.

You know the rest of the story – Romans watched their leadership and country get worse and worse.

All along the way, there were two types of people: The first group was folks that figured, “This has GOT to be the bottom; it can only get better from here.” Their patriotism was rewarded with reduced civil liberties, higher taxes, insane despots, and a debased currency.

The other group consisted of people who looked at the warning signs and thought, “I have to get out of here.” They followed their instincts and moved on to other places where they could build their lives, survive, and prosper.

I’m raising this point because I’d like to open a debate. Some consider the latter idea of expatriating to be akin to ‘running away.’ I recall a rather impassioned comment from a reader who suggested, “leaving, i.e. running away, is certainly not the proper response.”

I find this logic to be flawed.

While the notion of staying and ‘fighting’ is a noble idea, bear in mind that there is no real enemy or force to fight. The government is a faceless bureaucracy that’s impossible attack. People who try to do so usually discredit their argument because they become marginalized as fringe lunatics. Violence is rarely the answer, and it often has the opposite effect as intended, frequently serving to bolster support for the government instead of raising awareness of its shortcomings.

Unless/until government paramilitaries start duking it out with citizen militia groups in the streets, this is an ideological battle…and it’s an uphill battle at best.

Government-controlled educational systems institutionalize us from childhood that governments are just, and that we should all subordinate ourselves to authority and to the greater good that they dictate in their sole discretion.

You’re dealing with a mob mentality, plain and simple. Do you want to waste limited resources (time, money, energy) trying to convince your neighbor that s/he should not expect free money from the government?

You could spend a lifetime trying to change ideology and not make a dent; people have to choose for themselves to wake up; it cannot be forced upon them. And until that happens, they’re going to keep asking for more security and more control because it’s the way their values have been programmed.

When you think about it, what we call a ‘country’ is nothing more than a large concentration of people who share common values. Over time, those values adjust and evolve. Today, cultures in many countries value things like fake security, subordination, and ignorance over freedom, independence, and awareness.

When it appears more and more each day that those common values diverge from your own, all that’s left of a country are irrelevant, invisible lines on a map. I don’t find these worth fighting for.

Nobody is born with a mandatory obligation to invisible lines on a map. Our fundamental obligation is to ourselves, our families, and the people that we choose to let into our circles…not to a piece of dirt that’s controlled by mob-installed bureaucrats.

Moving away, i.e. making a calculated decision to seek greener pastures elsewhere, is not the same as ‘running away’…and I would argue that if you really want to affect change in your home country, moving away is the most effective course of action.

The government beast in your home country feeds on debt and taxes, and the best way to win is for bright, productive people to move away with their ideas, labor, and assets. This effectively starves the beast and accelerates its collapse. Then, when the smoke clears, you can move back and help rebuild a free society.

Wednesday, December 22, 2010

In a radio interview for Latino audiences, President Obama laid bare the ugly reality of statist government:

“If Latinos sit out the election instead of saying, ‘We’re going to punish our enemies and we’re gonna reward our friends who stand with us on issues that are important to us,’ if they don’t see that kind of upsurge in voting in this election, then I think it’s going to be harder and that’s why I think it’s so important that people focus on voting on November 2.”

Referring specifically to Republicans such as Senator John McCain, who formerly supported an overhaul but now are stressing border security and supporting strict immigration laws like Arizona’s anti-illegal immigration measure, Mr. Obama said, “Those aren’t the kinds of folks who represent our core American values.”

Did you ever imagine you would witness a President using this kind of rhetoric? Well, get used to it. He was dumping a fresh load of shame upon the office he occupies, but Barack Obama was also giving Latino voters some perfectly reasonable advice.

The power of the State is the power of compulsion. In a free country, this power is used to protect the rights of citizens. The “core value” of the Left is the embrace of “positive rights.” They believe citizens have a “right” to health care, affordable housing, and various other benefits. The State has a moral duty to use compulsive force to secure these “rights” for everyone.

What does a “right” to health care imply about the rights of doctors and insurance companies? The progressive taxation of income, which funds the State’s quest for social justice, compromises the right of highly taxed citizens to ownership of their time and property. The “right” to affordable housing unleashed the Godzilla of Fannie Mae upon the downtown Tokyo of the American economy.

It is logically impossible to provide a positive right to some, without compromising the rights of others. If cheap health insurance is compelled for those with pre-existing conditions, the right of insurance companies to run their business in a prudent, profitable manner is negated. If “free” health care is seized by government and distributed as it sees fit, the medical industry will become first indentured, and then nationalized, without regard to the will of its members. In a land where food is “free,” farmers are slaves.

A socialist government becomes an arbiter of rights. The State decides whose rights must be discarded, so that others can be satisfied. Naturally, politicians will make these decisions in accordance with their political interests, for as long as they must suffer popular elections. An individual’s rights become contingent on the influence of their political collective.

A highly organized group with well-connected leadership can expect its “rights” to be honored, at the expense of others. No doubt you thought of at least half a dozen examples while you read the previous sentence.

President Obama was entirely correct to advise the Latino voting bloc to hang together, obey its leadership, and trade their votes for rewards from the ruling class. When rights are balanced against each other, in an equation resolved by the use of compulsive force, those who belong to opposing groups are your enemies. Your prosperity comes with their defeat. Holding interest groups together becomes vitally important for success under the total State. The force which binds those groups will inevitably sour into hatred.

This is not a core American value, but it is a core value of the modern Democrat Party. Their President gave his Latino audience a taste of things to come. Tomorrow is France, and the day after is Greece

Roy Spencer, one of the nation’s leading climate scientists, says he’s frustrated that activists have hijacked the peer-review process to prevent the publication of sound science contradicting global warming alarmism. Spencer, a Ph.D.meteorologist, currently a principal research scientist at the University of Alabama, and formerly a senior scientist for climate studies at NASA, decided to write a book for everyone willing to take a little time to understand the basic physics behind the issue.

That book, The Great Global Warming Blunder, is a must-read for anyone interested in the scientific facts about global warming. Spencer documents that the science clearly shows man does not in fact control the climate in any significant way and the natural forces that continually alter the earth’s climate are relatively easy to discern and understand.

Spencer shows his brilliance by breaking down complex science into easily digestible facts understandable to anyone willing to read slowly and absorb his simple, real-life analogies. The latter include the effects of heating water in a pot on your stove and opening or closing your windows to moderate heat in a building or car.

Climate Model Flaws

Nobody understands better than Spencer the multitude of incentives which have both caused and allowed the anthropogenic global warming delusion to grow and prosper during the past two decades. I can assure you that anyone with honesty and an IQ exceeding plant life will, after reading Spencer’s book, at last understand the workings and proper role of mathematical climate models.

If the only thing you gain from The Great Global Warming Blunder is a better understanding of the positive and negative climate-factor feedbacks that are still in great dispute but which are central to alarmist global warming computer models, this alone will justify your purchase of the book. Spencer powerfully explains how carbon dioxide-induced global warming is mitigated by many negative feedbacks which keep temperatures from rising as rapidly as alarmists predict. This is perhaps the central flaw in alarmist global warming theory.

Spencer explains with easy logic how climate modelers relied on by the UN’s Intergovernmental Panel on Climate Change (IPCC) have mixed up cause and effect. IPCC decided that when warming coincides with reduced cloud cover, the warming must have reduced the cloud cover. However, it is far more likely that reduced cloud cover actually produced the warming, Spencer notes.

Getting cause and effect right corrects many of the overly alarmist flaws in IPCC’s computer models.

Hidden Agendas

Spencer expertly explains that IPCC, which does indeed employ some talented climate scientists, has its hands tied by bureaucrats who control the process and have financial incentives to continue asserting a global warming crisis.

Spencer is equally and rightly upset with the corporate pandering done to look “green” in the eyes of the public on the global warming issue. He writes, “when big business poses as being on the ‘CO2 is evil’ bandwagon the public perceives it as an acknowledgment that CO2 is a real problem and that something must be done,” when in reality it is just clever and dishonest marketing. Sadly, it all supports legislation that ends up hurting the public interest.

Planet’s Outlook Not Alarming

The Great Global Warming Blunder challenges our nation’s leaders to perform a critical review of the IPCC and its alarmist claims before making any policy decisions to redirect scarce resources from important needs and spend them on a phantom crisis.

Instead of fearing more carbon dioxide in the atmosphere, Spencer argues, we should consider the possibility our use of economically productive fossil fuels improves human wealth and well-being and that the resultant carbon dioxide emissions may actually be beneficial to life on earth.

You should buy this book as a belated Christmas present for anyone interested in global warming science. We all owe Roy Spencer a vote of thanks for his courage in telling it like it is from his position as one of the most prominent and accomplished climate scientists of our day.

Humans originally existed as members of small bands of nomadic
hunters/gatherers. They lived on deer in the mountains during the summer
and would go to the coast and live on fish and lobster in the winter.

The two most important events in all of history were:

1. The invention of beer, and

2. The invention of the wheel. The wheel was invented to get man to the
beer, and the beer to the man.

These facts formed the foundation of modern civilization and together were
the catalyst for the splitting of humanity into two distinct subgroups:

1. Liberals

2. Conservatives.

Once beer was discovered, it required grain and that was the beginning of
agriculture. Neither the glass bottle nor aluminum can were invented yet,
so while our early humans were sitting around waiting for them to be
invented, they just stayed close to the brewery. That's how villages were
formed.

Some men spent their days tracking and killing animals to BBQ at night
while they were drinking beer. This was the beginning of what is known as
the Conservative movement.

Other men who were weaker and less skilled at hunting learned to live off
the conservatives by showing up for the nightly BBQ's and doing the
sewing, fetching, and hair dressing. This was the beginning of the Liberal
movement.

Some of these liberal men eventually evolved into women. The rest became
known as girlie-men.
Some noteworthy liberal achievements include the domestication of cats,
the invention of group therapy and group hugs, the evolution of the
Hollywood actor, and the concept of Democratic voting to decide how to
divide all the meat and beer that conservatives provided.

Over the years, Conservatives came to be symbolized by the largest, most
powerful land animal on earth, the elephant. Liberals are symbolized by
the jackass.

Modern liberals like imported beer (with lime added), but most prefer
white wine or imported bottled water. They eat raw fish but like their
beef well done. Sushi, tofu, and French food are standard liberal fare..
Another interesting evolutionary side note: most of liberal women have
higher testosterone levels than their men. Most social workers, personal
injury attorneys, journalists, dreamers in Hollywood and group therapists
are liberals. Liberals invented the designated hitter rule because it
wasn't fair to make the pitcher also bat.

Conservatives drink domestic beer. They eat red meat and still provide for
their women. Conservatives are big-game hunters, rodeo cowboys,
lumberjacks, construction workers, firemen, medical doctors, police
officers, corporate executives, athletes, Soldiers, Sailors, Marines, and
generally anyone who works productively. Conservatives who own companies
hire other conservatives who want to work for a living..

Liberals produce little or nothing. They like to govern the producers and
decide what to do with the production. Liberals believe Europeans are more
enlightened than Americans. That is why most of the liberals remained in
Europe when conservatives were coming to America. They crept in after the
Wild West was tamed and created a business of trying to get more for
nothing.

Here ends today's lesson in world history.......
It should be noted that a liberal may have a momentary urge to angrily
respond to the above before forwarding it.

A conservative will simply laugh and be so convinced of the absolute truth
of this history that it will be forwarded immediately to other true
believers, and to more liberals...just to yank their chain.

In a powerful rebuke of environmental extremism and a proposed law that would enable the U.S. Environmental Protection Agency to assert unprecedented authority under the Clean Water Act, Minnesota voters removed 18-term Democratic Congressman James Oberstar from office in the Nov. 2 midterm elections.

Huge Political Upset

To many pundits the defeat of long-serving Democratic Congressman Oberstar by a political newcomer, Republican candidate Chip Cravaack, was one of the November elections’ biggest upsets. The stunning upset ended the career of a politician defined by his support for an extreme environmental activist agenda including cap-and-trade and expansive enforcement of the Endangered Species Act and federal wetlands regulations

Prior to the November election, Oberstar had never received less than 59 percent of the vote. But on Nov. 2, he garnered only 47 percent of the vote, 1 percent less than his GOP opponent.

‘Flat Earth’ Comment Backfired

One of the last straws for voters occurred during Oberstar’s October 19 debate with Cravaack in Duluth.

The chairman of the powerful House Transportation and Infrastructure Committee angrily responded to criticism of his support for cap-and-trade legislation to reduce carbon dioxide emissions by declaring, “Well, I'm sorry if the Flat Earth Society over here doesn't believe it.”

The crowd booed heartily, symbolizing Oberstar’s growing disconnect with voters in his district.

Then, in a debate with Cravaak shortly before the election, Oberstar was booed by his Duluth audience when he tried to explain his support for the Waxman-Markey cap-and-trade bill.

Signature Water Bill

In recent years Oberstar had sought to expand federal regulation of wetlands and other bodies of water, which put him at odds with farmers and other landowners in his predominantly rural district.

Originally known as the “Clean Water Restoration Act” and recently renamed the “America’s Commitment to Clean Water Act,” Oberstar’s bill would have brought vast stretches of rural America under Washington’s direct control.

Specifically, his bill would amend the 1972 Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), to replace the term “navigable” with “waters of the United States.” By doing so, the CWA would be expanded to encompass all waters currently used, used in the past, or possibly susceptible to commercial use in the future, including all interstate and international waters and all other waters and their tributaries, including intrastate lakes, rivers, streams, mudflats, sandflats, wetlands, ponds, meadows, and sloughs.

The bill was aimed at overturning two recent Supreme Court decisions restricting application of the CWA.

Bill Was Vigorously Opposed

Enthusiastically backed by environmental groups, the bill is vigorously opposed by a wide variety of grassroots citizens’ groups, agricultural producers, foresters, and state and local governments. The National Association of Counties and the Minnesota Association of Counties have fought the bill tooth-and-nail.

Oberstar never succeeded in getting his controversial legislation to the House floor for a vote, but he continued pushing for the bill right up until the November election. A watered-down version of his bill cleared the Senate Environment and Public Works Committee last year, but it was never brought to the floor, where it faced a certain filibuster.

Nothing even remotely resembling the Oberstar bill is given any chance of seeing the light of day when the new, 112th Congress convenes in January.

“Expansion of federal authority under this legislation would create a cumbersome

permitting process, resulting in unnecessary and costly delays,” said Don Munks, former Water Quality Committee Chair for the National Association of Counties.

Water Bill Sealed Doom

Oberstar’s legislation was a defining issue in his defeat, says Don Parmeter, cochairman of the Minnesota-based National Water & Conservation Alliance.

“The citizens of Minnesota’s 8th Congressional District have historically and aggressively opposed this kind of expansive federal legislation,” said Parmeter, a former pollution-control engineer who has lived in Oberstar’s district for 30 years. “Mr. Oberstar had won reelection since 1974 by such wide margins that he failed to see how people in water-rich northern Minnesota would be economically devastated by his legislation.”

Bonner R. Cohen, Ph. D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research. D. Brady Nelson (d.brady.nelson@mac.com) is a Milwaukee-based freelance economist.

Tuesday, December 14, 2010

Crockett was then the lion of Washington. I was a great admirer of his character, and, having several friends who were intimate with him, I found no difficulty in making his acquaintance. I was fascinated with him, and he seemed to take a fancy to me.

I was one day in the lobby of the House of Representatives when a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support – rather, as I thought, because it afforded the speakers a fine opportunity for display than from the necessity of convincing anybody, for it seemed to me that everybody favored it. The Speaker was just about to put the question when Crockett arose. Everybody expected, of course, that he was going to make one of his characteristic speeches in support of the bill. He commenced:

Friday, December 10, 2010

The contact out of London has updated King World News on the massive Asian buyers which have been accumulating both gold and silver. The London source stated, “A bunch of the weak hands are now on the short side of this market. We are very close to a floor because of the massive Asian buying. People have to remember these Asian buyers are now controlling the gold and silver markets, it is not the little guy.”

The London source continues:

“It’s all about the bond auctions, the bond fell off a cliff. In the derivatives market you’ve got JP Morgan playing the bond market at the behest of the Fed, going long 30 years versus selling short-term paper. They buy 30 year paper and then immediately hedge themselves by selling the 30, 60 and 90 day paper. It’s how they keep interest rates down, it’s how you do it.

The only reason interest rates are not in double digits in the US is because of this game. These guys are short front month paper. If this (the bond market) actually fell much longer, JP Morgan could be wiped out, I mean they would be liquidated. The Fed cannot allow them to do that. We’re witnessing history here.

Money flowing out of bonds is going into precious metals. So what they are doing is trying to paint the tape and make it look like a double-top in gold, with silver also retreating. Open interest went up into the decline, this is a gift (the decline). Asian buyers are laughing, we’re like a cartoon to them. They cannot believe how orchestrated this is.”

Where do you see a floor on silver?

“I think to go through $27 is virtually impossible, it would be suicide. I don’t think it will even get there. They are getting very cheeky even taking it below $28. They are not going to push it below $27 because they would just lose too much physical.

All that’s happening here is the Fed is freaking out because the bond market is collapsing and they want to indicate that everything is fine, and certainly that precious metals is not your alternative. Meanwhile, the Asians will continue to buy any dip and keep adding to their position. For what it is worth, Jim Rickards is correct, the Asians are doing their buying through secret agents.”

What about gold?

“As far as the gold market is concerned, gold will be $150 higher from here within five weeks.”

Well there you have it, this London source has called these markets to absolute perfection. There is a huge floor nearby, and gold will explode $150 higher in a matter of weeks. Stay tuned as we will have more from the KWN source out of London in the days ahead.

Wednesday, December 8, 2010

In the case of Mohamad Mohamud, the Somali-born U.S. citizen cast as the patsy in the FBI’s most recent pseudo-terrorism plot…

…Mohamud hadn’t done anything that could be defined as a criminal act by even the most emancipated definition. This changed after the young man was radicalized by two specialists from the FBI’s vast and experienced corps of professional provocateurs, who successfully engineered a supposed terrorist plot and manipulated Mohamud into triggering what he was told was a powerful explosive device at a Christmas tree lighting in Corvallis.

“Our investigation shows that Mohamud was absolutely committed to carrying out an attack on a very grand scale,” intoned FBI Special Agent Arthur Balizan, who gets the “Producer” credit for the most recent Homeland Security melodrama. “At the same time, I want to reassure the people of this community that, at every turn, we denied him the ability to actually carry out the attack.”

Even the Devil can cite scripture to his purpose, and even a Fed is capable of telling an isolated truth in the service of a larger lie. Balizan was entirely correct in saying that the FBI “denied” Mohamud the ability to carry out an attack, because the Bureau — following a familiar and tiresome script — supplied both the motivation and the means for this plot, once a suitable stooge had been identified.

The evidence presented in the FBI affidavit offers no reason to believe that Mohamud intended to harm anyone before he fell under the influence of two undercover operatives from the Bureau’s Homeland Security theater troupe.

Court-authorized surveillance of the teenager’s e-mail suggested that Mohamud was in touch with someone residing in northwest Pakistan, “an area known to harbor terrorists.” The affiant, FBI Special Agent Ryan Dwyer, recounts that Mohamud and his correspondent “communicated regularly, and in December 2009 I believe, using coded language” — presumably understood only by the wise and perceptive people employed by the Bureau — “they discussed the possibility of Mohamud traveling to Pakistan to prepare for violent jihad.”

Mohamud allegedly tried to contact another Muslim radical to make travel plans, but sent his e-mails to an inoperative address. Shortly thereafter, an FBI undercover operative contacted Mohamud and did what a federal operative will always do in such cases: He acted as a “terrorism facilitator” (a term actually used by a federal prosecutor in an earlier FBI-orchestrated plot), carefully nourishing whatever spark of potential radicalism he found in his subject.

This is the same template from which the FBI has created dozens or scores of ersatz terrorist plots. There is one critical and telling detail in this case that distinguishes it from the others: Prior to being approached by the FBI’s provocation squad, Mohamud attempted to travel to Alaska to work at a legitimate job, but was prevented from doing so when the Feds — who had him under surveillance — put him on a no-fly list. The teenager was then approached by a covert FBI operative who “hired” him to carry out a terrorist attack, providing the unemployed young man with $3,000 in cash.

Attorney General Eric Holder insists that Mohamud “chose at every step to continue” with the bombing plot orchestrated by the Feds — once other avenues of employment had been cut off, that is. And since the FBI’s undercover operative conveniently “failed” to record the original contact with Mohamud — which took place after he had been prevented from taking the job in Alaska — there’s no way to assess the extent to which the Bureau controlled his “steps” from the very beginning.

This is incredibly cool and scary at the same time.
By Ed Barnes
Published November 26, 2010
FoxNews.com

In the 20th century, this would have been a job for James Bond.

The mission: Infiltrate the highly advanced, securely guarded enemy headquarters where scientists in the clutches of an evil master are secretly building a weapon that can destroy the world. Then render that weapon harmless and escape undetected.

But in the 21st century, Bond doesn't get the call. Instead, the job is handled by a suave and very sophisticated secret computer worm, a jumble of code called Stuxnet, which in the last year has not only crippled Iran's nuclear program but has caused a major rethinking of computer security around the globe.

Intelligence agencies, computer security companies and the nuclear industry have been trying to analyze the worm since it was discovered in June by a Belarus-based company that was doing business in Iran. And what they've all found, says Sean McGurk, the Homeland Security Department's acting director of national cyber security and communications integration, is a “game changer.”

The construction of the worm was so advanced, it was “like the arrival of an F-35 into a World War I battlefield,” says Ralph Langner, the computer expert who was the first to sound the alarm about Stuxnet. Others have called it the first “weaponized” computer virus.

Simply put, Stuxnet is an incredibly advanced, undetectable computer worm that took years to construct and was designed to jump from computer to computer until it found the specific, protected control system that it aimed to destroy: Iran’s nuclear enrichment program.

The target was seemingly impenetrable; for security reasons, it lay several stories underground and was not connected to the World Wide Web. And that meant Stuxnet had to act as sort of a computer cruise missile: As it made its passage through a set of unconnected computers, it had to grow and adapt to security measures and other changes until it reached one that could bring it into the nuclear facility.

When it ultimately found its target, it would have to secretly manipulate it until it was so compromised it ceased normal functions.

And finally, after the job was done, the worm would have to destroy itself without leaving a trace.

That is what we are learning happened at Iran's nuclear facilities -- both at Natanz, which houses the centrifuge arrays used for processing uranium into nuclear fuel, and, to a lesser extent, at Bushehr, Iran's nuclear power plant.

At Natanz, for almost 17 months, Stuxnet quietly worked its way into the system and targeted a specific component -- the frequency converters made by the German equipment manufacturer Siemens that regulated the speed of the spinning centrifuges used to create nuclear fuel. The worm then took control of the speed at which the centrifuges spun, making them turn so fast in a quick burst that they would be damaged but not destroyed. And at the same time, the worm masked that change in speed from being discovered at the centrifuges' control panel.

At Bushehr, meanwhile, a second secret set of codes, which Langner called “digital warheads,” targeted the Russian-built power plant's massive steam turbine.

Here's how it worked, according to experts who have examined the worm:

--The nuclear facility in Iran runs an “air gap” security system, meaning it has no connections to the Web, making it secure from outside penetration. Stuxnet was designed and sent into the area around Iran's Natanz nuclear power plant -- just how may never be known -- to infect a number of computers on the assumption that someone working in the plant would take work home on a flash drive, acquire the worm and then bring it back to the plant.

--Once the worm was inside the plant, the next step was to get the computer system there to trust it and allow it into the system. That was accomplished because the worm contained a “digital certificate” stolen from JMicron, a large company in an industrial park in Taiwan. (When the worm was later discovered it quickly replaced the original digital certificate with another certificate, also stolen from another company, Realtek, a few doors down in the same industrial park in Taiwan.)

--Once allowed entry, the worm contained four “Zero Day” elements in its first target, the Windows 7 operating system that controlled the overall operation of the plant. Zero Day elements are rare and extremely valuable vulnerabilities in a computer system that can be exploited only once. Two of the vulnerabilities were known, but the other two had never been discovered. Experts say no hacker would waste Zero Days in that manner.

--After penetrating the Windows 7 operating system, the code then targeted the “frequency converters” that ran the centrifuges. To do that it used specifications from the manufacturers of the converters. One was Vacon, a Finnish Company, and the other Fararo Paya, an Iranian company. What surprises experts at this step is that the Iranian company was so secret that not even the IAEA knew about it.

--The worm also knew that the complex control system that ran the centrifuges was built by Siemens, the German manufacturer, and -- remarkably -- how that system worked as well and how to mask its activities from it.

--Masking itself from the plant's security and other systems, the worm then ordered the centrifuges to rotate extremely fast, and then to slow down precipitously. This damaged the converter, the centrifuges and the bearings, and it corrupted the uranium in the tubes. It also left Iranian nuclear engineers wondering what was wrong, as computer checks showed no malfunctions in the operating system.

Estimates are that this went on for more than a year, leaving the Iranian program in chaos. And as it did, the worm grew and adapted throughout the system. As new worms entered the system, they would meet and adapt and become increasingly sophisticated.

During this time the worms reported back to two servers that had to be run by intelligence agencies, one in Denmark and one in Malaysia. The servers monitored the worms and were shut down once the worm had infiltrated Natanz. Efforts to find those servers since then have yielded no results.

This went on until June of last year, when a Belarusan company working on the Iranian power plant in Beshehr discovered it in one of its machines. It quickly put out a notice on a Web network monitored by computer security experts around the world. Ordinarily these experts would immediately begin tracing the worm and dissecting it, looking for clues about its origin and other details.

But that didn’t happen, because within minutes all the alert sites came under attack and were inoperative for 24 hours.

“I had to use e-mail to send notices but I couldn’t reach everyone. Whoever made the worm had a full day to eliminate all traces of the worm that might lead us them,” Eric Byres, a computer security expert who has examined the Stuxnet. “No hacker could have done that.”

Experts, including inspectors from the International Atomic Energy Agency, say that, despite Iran's claims to the contrary, the worm was successful in its goal: causing confusion among Iran’s nuclear engineers and disabling their nuclear program.

Because of the secrecy surrounding the Iranian program, no one can be certain of the full extent of the damage. But sources inside Iran and elsewhere say that the Iranian centrifuge program has been operating far below its capacity and that the uranium enrichment program had “stagnated” during the time the worm penetrated the underground facility. Only 4,000 of the 9,000 centrifuges Iran was known to have were put into use. Some suspect that is because of the critical need to replace ones that were damaged.

And the limited number of those in use dwindled to an estimated 3,700 as problems engulfed their operation. IAEA inspectors say the sabotage better explains the slowness of the program, which they had earlier attributed to poor equipment manufacturing and management problems. As Iranians struggled with the setbacks, they began searching for signs of sabotage. From inside Iran there have been unconfirmed reports that the head of the plant was fired shortly after the worm wended its way into the system and began creating technical problems, and that some scientists who were suspected of espionage disappeared or were executed. And counter intelligence agents began monitoring all communications between scientists at the site, creating a climate of fear and paranoia.

Iran has adamantly stated that its nuclear program has not been hit by the bug. But in doing so it has backhandedly confirmed that its nuclear facilities were compromised. When Hamid Alipour, head of the nation’s Information Technology Company, announced in September that 30,000 Iranian computers had been hit by the worm but the nuclear facilities were safe, he added that among those hit were the personal computers of the scientists at the nuclear facilities. Experts say that Natanz and Bushehr could not have escaped the worm if it was in their engineers’ computers.

“We brought it into our lab to study it and even with precautions it spread everywhere at incredible speed,” Byres said.

“The worm was designed not to destroy the plants but to make them ineffective. By changing the rotation speeds, the bearings quickly wear out and the equipment has to be replaced and repaired. The speed changes also impact the quality of the uranium processed in the centrifuges creating technical problems that make the plant ineffective,” he explained.

In other words the worm was designed to allow the Iranian program to continue but never succeed, and never to know why.

One additional impact that can be attributed to the worm, according to David Albright of the Institute for Science and International Studies, is that “the lives of the scientists working in the facility have become a living hell because of counter-intelligence agents brought into the plant” to battle the breach. Ironically, even after its discovery, the worm has succeeded in slowing down Iran's reputed effort to build an atomic weapon. And Langer says that the efforts by the Iranians to cleanse Stuxnet from their system “will probably take another year to complete,” and during that time the plant will not be able to function anywhere normally.

But as the extent of the worm’s capabilities is being understood, its genius and complexity has created another perplexing question: Who did it?

Speculation on the worm’s origin initially focused on hackers or even companies trying to disrupt competitors. But as engineers tore apart the virus they learned not only the depth of the code, its complex targeting mechanism, (despite infecting more than 100,000 computers it has only done damage at Natanz,) the enormous amount of work that went into it—Microsoft estimated that it consumed 10,000 man days of labor-- and about what the worm knew, the clues narrowed the number of players that have the capabilities to create it to a handful.

“This is what nation-states build, if their only other option would be to go to war,” Joseph Wouk, an Israeli security expert wrote.

Byers is more certain. “It is a military weapon,” he said.

And much of what the worm “knew” could only have come from a consortium of Western intelligence agencies, experts who have examined the code now believe.

Originally, all eyes turned toward Israel's intelligence agencies. Engineers examining the worm found “clues” that hinted at Israel’s involvement. In one case they found the word “Myrtus” embedded in the code and argued that it was a reference to Esther, the biblical figure who saved the ancient Jewish state from the Persians. But computer experts say "Myrtus" is more likely a common reference to “My RTUS,” or remote terminal units.

Langer argues that no single Western intelligence agency had the skills to pull this off alone. The most likely answer, he says, is that a consortium of intelligence agencies worked together to build the cyber bomb. And he says the most likely confederates are the United States, because it has the technical skills to make the virus, Germany, because reverse-engineering Siemen’s product would have taken years without it, and Russia, because of its familiarity with both the Iranian nuclear plant and Siemen’s systems.

There is one clue that was left in the code that may tell us all we need to know.

Embedded in different section of the code is another common computer language reference, but this one is misspelled. Instead of saying “DEADFOOT,” a term stolen from pilots meaning a failed engine, this one reads “DEADFOO7.”

Over the last several months we have been pondering if governments will come into the silver market. Before we get into that, it is important to note that governments are very different animals and there are over two hundred of them out there. Therefore, it is a very liberal generalization to lump them all together as if their needs, objectives and agendas were the same, thus expecting them all to act in the same fashion for the same reasons, is a big stretch. That said, it's the stigma, the psychological effect, the sentiment and the message it would send to markets that prompts us to group them together in investors' minds as a market force.

This is one of the best descriptions of the current economic/monetary situation I have ever read. It is unfortunate that it came from a slide show, and graphs that are referenced are not available. Even, so the points are succinct and understandable.

You need to read this if you believe the economy is recovering (Dave A.)(see frame 4), gold is in a bubble (Mom)(see frames 8-13), or that there is a demand deficit (Mike M.) (see frames 3+5).

Friday, December 3, 2010

For decades, the world's banking system has been on a fiat currency standard that has led to banks that are "too big to fail". They have overreached their remit of providing loans and have leeched into the political system, using our money to change the political agenda in ways that boost bank management's compensation over the interests of their depositors.

Also on Cif ...

Deborah Hargreaves on how Eric Cantona's bank protest would hurt us all Over the past 11 years, the Gata (Gold Anti-Trust Action) committee has worked to reveal the silver/gold price suppression scheme; thanks to whistleblower Andrew Maguire in London, an investigation has been opened. As part of the ongoing exposé, it has now become clear that JP Morgan is sitting on what is estimated to be 3.3bn ounce "short" position in silver (which they have sold short, meaning they don't own it to begin with) in an attempt to keep the price artificially low in order to keep the relative appeal of the dollar and other fiat currencies high. The potential liability for JP Morgan has been an open secret for a few years.

On my show, Keiser Report, I recently invited Michael Krieger, a regular contributor of Zero Hedge (the WikiLeaks of finance). We posited that if 5% of the world's population each bought a one-ounce coin of silver, JP Morgan would be forced to cover their shorts – an estimated $1.5tn liability – against their market capital of $150bn, and the company would therefore go bankrupt. A few days later, I suggested on the Alex Jones show that he launch a "Google bomb" with the key phrase "crash jp morgan buy silver".

One may be forgiven to believe that via its FX liquidity swap lines the Fed only bailed out foreign Central Banks, which in turn took the money and funded their own banks. It turns out that is only half the story: we now know the Fed also acted in a secondary bail out capacity, providing over $350 billion in short term funding exclusively to 35 foreign banks, of which the biggest beneficiaries were UBS, Dexia and BNP. Since the funding provided was in the form of ultra-short maturity commercial paper it was essentially equivalent to cash funding. In other words, between October 27, 2008 and August 6, 2009, the Fed spent $350 billion in taxpayer funds to save 35 foreign banks. And here people are wondering if the Fed will ever allow stocks to drop: it is now more than obvious that with all banks leveraging the equity exposure to the point where a market decline would likely start a Lehman-type domino, there is no way that the Brian Sack-led team of traders will allow stocks to drop ever... Until such time nature reasserts itself, the market collapses without GETCO or the PPT being able to catch it, and the Fed is finally wiped out in one way or another.

Thursday, December 2, 2010

December 1, 2010 – Both gold and silver demonstrated some spectacular performance yesterday, climbing 1.4% and 3.8% respectively from the previous day’s closing price. November is the eighth month that gold has risen this year to generate its 26.5% year-to-date appreciation. Silver has also risen eight months this year, and so far is up a stunning 67.5%.

We can reasonably expect some more big moves higher, given how tight the market for physical metal remains. Physical metal cannot be conjured out of thin air like national currencies and paper representations of gold and silver. Mine production cannot be turned on overnight to increase the supply of newly mined metal. It takes years to build a mine. So where is the supply going to come from to meet the ever-growing demand for these two precious metal safe havens in a world wracked by sovereign debt worries, volatile currencies, banks loaded with dodgy assets and politicians who are placing with their serial bailouts never-ending burdens on the backs of taxpayers?

The capitalist system has lifted mankind out of mass poverty. It is this system that in the last century and in the last generation, has progressively changed the face of the world, and has provided the masses of mankind with amenities that even kings did not posses or imagine a few generations ago. - Henry Hazlitt

The American people will never knowingly adopt socialism. But, under the name of “liberalism”, they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened..I no longer need to run as a Presidential Candidate for the Socialist Party. The Democratic Party has adopted our platform. - Norman Thomas

So long as the people do not care to exercise their freedom, those who wish to tyrannize will do so; for tyrants are active and ardent, and will devote themselves in the name of any number of gods, religious and otherwise, to put shackles upon sleeping men. - Voltaire, 1764